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VAT Returns

You need to file returns either monthly or quarterly, depending on your location and turnover.

Data Check

We do a through check of the files you send in

Vendor Connect

We will appoint an affiliate to process your application

Receipt of License

The TIN will be issued within 15 days of the application

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Vat Return Filing & VAT Due Date

All business entities engaged in the sale of goods (traders and manufacturers) need to have a Value Added Tax (VAT) Registration, often called TIN Registration, once their annual turnover crosses around Rs. 5 lakh (Rs. 10 lakh in some states). The tax needs to be collected from consumers and deposited in a designated bank account to the state government. As VAT is decided by the state, the rates, due dates and even websites for filing returns differ by state. If you have operations in more than one location, you would, therefore, need to file returns separately. Return filing needs to be done once every month or once every quarter, depending on your location and turnover. Additionally, all states require a consolidated return to be filed at the end of the year. Vakilsearch can ensure that you never miss a VAT due date by setting reminders for the information you would need to provide and always filing your returns before the due date.

6 Essential Facts on VAT Return Filing

When do you need VAT Registration?

Whether or not you need VAT registration right now depends on the state in which your business is operating. In most states, registration is not required at all until your turnover crosses a certain threshold. This is usually Rs. 5 lakh in annual revenues. It also matters what it is you’re selling, as some items may be exempt. Salt, for example, is exempt from VAT.

What are the requirements for filing VAT returns?

To file returns on your own, you would need to have the login details for your VAT account, which would have been given to you at the time of registration, the software for preparing the returns (this is available on the government commercial taxes website) and all the VAT receipts for the period you are filing the returns for. Of course, you should also know your TIN number.

Is it better to file VAT returns online?

Yes, it is certainly better to file VAT returns online. Particularly given that filing VAT returns can take a whole day every month, it is best to do it online. This is because it is quicker to do so and saves you the trouble of travelling to the VAT office to file physically. The online system also gives you realtime feedback, so it's no different than filing the return in person. On the other hand, some state government websites are often down for extended periods of time.

How do I pay the government the tax I collect and file returns?

VAT is collected at every stage of production, so some of the amount you collect from your customers will be retained by you, while the remainder will be paid to government via designated banks on a monthly basis. Returns must also be filed. The date and frequency differs with every state.

What is the VAT Composition Scheme?

Businesses with a turnover of between Rs. 10 lakh and Rs. 50 lakh can simplify VAT compliance by applying for the VAT Composition Scheme. By joining this scheme, they will pay a lower rate of tax, that is fixed, and file only quarterly, or, for some businesses, annual returns.

Can payment be made and returns filed online?

Yes, all Indian states have websites (although some don't work very well) that allow payment of the VAT collected and return filing.

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FAQs on VAT Registration

1. Do I need to be in office during the inspection? Yes, it is better if you are in office during the inspection. We will try to inform you about the time of the visit. However, surprise visits are occasionally conducted.

2. Will a residential office be sufficient? No, it won't. However, if you have a commercial space attached to your house, so long as it has a separate entrance, it can be treated as a commercial establishment.

3. When are VAT filings to be done? Due dates differ from state to state, as VAT is a state subject. Most states require VAT to be filed monthly, and also need an annual return to be filed.

4. What is the deposit amount? How do I deposit it? In Mumbai and Pune, the amount is Rs. 30,030. The applicant needs to have two demand drafts for Rs. 25,000 and Rs. 5030 in favour of MVAT. In Delhi and Chennai, no deposit is needed. In Bangalore, Ahmedabad and Kerala, it ranges from Rs. 5000 to Rs. 25,000, depending on the type of the business. In Gurgaon, Noida and Ghaziabad, there is no deposit but you need to furnish a bank guarantee of Rs. 1 lakh.

5. How do I send in the documents? You can scan and send us the documents. We could even arrange for the documents to be picked up by our representatives.

6. What is Central Sales Tax? VAT is levied on intra-state sale of goods, while Central Sales Tax (CST) applies to inter-state sale of goods. The application for CST Registration is made in the VAT Registration form. You will receive both registrations simultaneously.

VAT Returns Process

Returns Preparation

We will collect all the necessary information and documents (TIN Number, balance sheet, tax liability, state of operation) to prepare your returns. Once done the first time, our affiliate will then ensure that you are always reminded of the filing date so you don't end up paying penalties.

Returns Filing

We will give you the opportunity to review the filing. One you approve it, we will file the returns with the state government. Upon successful completion of the process, we will mail the acknowledgment form to your registered email address.